Under Trump Administration, Copyright Issues Take Center Stage at Music Biz 2017 Conference
While the country watches the daily operations of the Donald Trump administration unfold on cable news and in the pages and websites of publications large and small, the music industry has a vested interest in how it all plays out as well. And with May 18 looming as the deadline for the Department of Justice to file a brief on its planned appeal of a Federal Court decision that the BMI consent decree doesn't require the organization to do full-works licensing, many on the publishing side of the industry are waiting to see if the DOJ will actually go through with proceedings, with a new director yet to be approved.
That was one of the many copyright issues raised today (May 15) during the opening sessions of the annual Music Biz convention, held this week in Nashville. In fact, panelists at the first two session of the confab wrestled with some of the same legal and economic issues that have stymied the industry for the past few years.
In the case of the DOJ, when music publishers and PROs (BMI and ASCAP) went to the DOJ in an attempt to get the 75-year-old consent decrees amended to reflect the digital world, the music industry got hit with a double whammy. Not only wouldn't the DOJ make the requested changes, it said the music industry wasn't properly following its consent decrees, which require that if a song has multiple writers, a music licensee -- like a radio station -- only needs the license from one of the various writers or their representatives. (This is called full-works, or 100 percent licensing; the implications are explained here.)
But music publishers and PROs say they have been practicing fractional licensing, which means that the music user must get a license from each owner of the song. For their part, the music licensees say that they believe that they have been engaging in full-works licensing, but fractionalized payments, so that each owner would get their fair remuneration.
Judge Louis Stanton, who oversees the BMI rate court, disagreed with the DOJ last year and said that the consent decree doesn't require full-works licensing, and the DOJ has announced its plans to appeal. But now, with the deadline looming on Thursday for the case to move forward, U.S. Congresswoman Marsha Blackburn (R-Tenn.), a panelist on the opening day session, told convention attendees that she and other colleagues in the House have written a letter to the DOJ urging them not to file the brief on May 18, which would end the case.
This latest letter to the DOJ might have more of an impact than previous overtures. Under the new administration, President Trump has appointed Makan Delrahim to head the DOJ, but he has yet to be confirmed and likely won't be by Thursday's deadline.
"If they don't file their appeal brief by Thursday, the matter is over," noted panel moderator John Bieter, a partner with Leavens, Strand & Glover.
SESAC executive vp of creative and business affairs Dennis Lord observed that though the ruling seems to only impact BMI, it would indeed impact all four PROs -- even the two that don't have to abide by the consent decree. "Over a period of time, it would result in a race to the bottom rate," Lord said explaining that licensees could shop among the PROs for the lowest rate. "It would throw the industry into a tailspin."
Another big issue that the industry hopes sees some light during the Trump administration is for artists and labels to win a master recording performance right. Blackburn said this is especially important for older artists who weren't songwriters and can no longer make a living through touring. That, she said, is why the Fair Play Fair Pay Act was recently reintroduced into Congress.
Moreover, since the U.S. doesn't have a master recording performance right, payments aren't made to U.S. performers even overseas, where those rights do exist. "We estimate the $200 million a year are being lost by U.S. artists," noted the Recording Academy senior director of advocacy & public policy Todd Dupler. "Think back over the years how many billions of dollars have been lost."